Frank Rondel
SoFi Technologies reported a significant increase in its fourth-quarter profit on Friday, driven by robust loan demand and rapid expansion in fee-based services, reports customreceipt.com via YaHoo. In premarket trading, the company’s shares rose 5.7% as investors reacted positively to the earnings report.
The fintech firm, which has gained popularity among younger customers preferring app-based financial solutions over traditional banks, saw its financial services segment—including credit card and investing products—generate $456.7 million in revenue for the quarter ended December 31, marking a 78% increase from the prior year.
Founded in 2011 initially as a student-loan refinancing company, SoFi has broadened its offerings to personal loans, mortgages, investing, and payments, targeting a tech-savvy, younger demographic. Revenue from fee-based services, which provides a buffer against fluctuations in interest rates, rose 53% compared with the same period last year.
Total loan originations reached a record $10.5 billion, up 46% year-on-year, driven by sustained demand for personal, student, and home loans. CEO Anthony Noto noted that credit performance met expectations, emphasizing that the overall financial health of SoFi members across spending, investing, and credit remained strong.
Earlier this month, former U.S. President Donald Trump proposed a 10% cap on credit card interest rates, a move banks warn could reduce consumer access to credit. Noto highlighted that such a cap might shrink credit card lending but could create new opportunities for personal loans as an upfront financing option, potentially boosting business for fintech companies.
For the fourth quarter, SoFi’s adjusted revenue climbed 37% to a record $1 billion, while its adjusted profit more than doubled to 13 cents per share from 5 cents in the same period last year.
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